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Is there a Bitcoin ATM in Dubai's Media City?

While the reader wants to locate an ATM to withdraw bitcoin, the experts advise against holding the cryptocurrency in the first instance

While many investors are scrambling to get into digital currencies such as bitcoin, our money clinic experts warn that it is highly speculative. Benoit Tessier / Reuters

July 31, 2017

July 31, 2017

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I have read there is a Bitcoin ATM in Dubai's Media City but there is no location mentioned, and last time I could not find anywhere to withdraw my money. So where are the Bitcoin ATMs in the UAE? AH, Dubai

Expert 1: Sam Instone, chief executive of AES International

Bitcoin is a cryptocurrency – a peer-to-peer electronic cash system. Therefore, Bitcoin ATMs are not like traditional cash machines; you can’t withdraw bitcoins and spend them at the supermarket.

Rather, the ATMs are terminals connected to the internet, allowing users to insert cash in exchange for Bitcoins, which are given in the form of a paper receipt. Some are bi-directional and allow the redemption of electronically held Bitcoins for cash … which you can spend at the supermarket.

The machines connect to a Bitcoin exchange, and most require users to have an existing account to transact using the machine. The ATMs have been heavily criticised for charging high transaction fees and offering unfavourable exchange rates.

In terms of whether one exists in Dubai Media City, there was a story to this effect a few years ago but it later proved to be false; there was no such machine.

But it is important you are aware that Bitcoin as a currency is also highly speculative, meaning its value may rapidly increase or decrease in value.

One such swing in 2013 lost Bitcoin holders 85 per cent of the value of their currency overnight – which means Bitcoins are not suitable for serious investors.

They are, however, allegedly favoured by the criminal fraternity, because transactions can be hard to track.

Forbes columnist Jason Bloomberg recently made a bold and sweeping statement on this point: " ... the only reason Bitcoin has value to anyone is because of the underlying value as a medium of exchange for lawbreakers. If we could flip a switch and eliminate all illegal uses of Bitcoin, there would be nothing left of the cybercurrency."

He is not the only one sceptical about Bitcoin. The world’s greatest investor, Warren Buffett was recently quoted as saying: “Stay away. Bitcoin is a mirage. It’s a method of transmitting money … The idea this it has some huge intrinsic value is a joke in my view.”

The main problem with cryptocurrencies are they aren’t tangible – they aren’t businesses, bonds or property – this means they don’t create cash.

They are only worth as much as the market will pay at any given moment … and that’s dangerous.

Author of Millionaire Teacher and expat financial educator Andrew Hallam says: "The four most dangerous words for investors are: 'This time it's different'; They were whispered during The South Sea Bubble. They were uttered during The Dutch Tulip Craze. They were shouted from the rooftops during the 1990s dot-com charade..."

I’d wager that many of those invested in Bitcoin and its cryptocurrency contemporaries are chanting that same mantra today: “This time it’s different, this time it’s different.”

But it’s not. Cryptocurrencies don’t make profits – heed the lessons of your investing forefathers. You don't want to be owning Bitcoin when reality finally hits and its value crashes completely.

However, if you’re determined to find a bitcoin ATM near you, try https://coinatmradar.com/ – but it suggests there are currently none in Dubai.

At present, there are no Bitcoin ATMs located in the UAE. It is important to point out that Bitcoin, or other such cryptocurrencies, are completely decentralised and are not regulated by global governments and their respective central banks. Closer to home, the UAE Central Bank is reviewing virtual currencies and will issue new regulations as appropriate. Therefore, finding such an outlet to withdraw your funds is extremely rare and difficult, particularly in this region. A couple of methods you could try would be to offload your Bitcoin on some of the bigger global Bitcoin exchanges, or you could use it to pay for some of your favorite goods and services online in the US or Europe as some vendors have started accepting Bitcoin as method of payment. Again, I would stress the care in trading in Bitcoin and other cryptocurrencies until global financial systems fully recognise these products. Dealing in them should be done with caution.

Next question:

I want to buy a new car, but am mystified by all the deals offering five-year warranties or three years' free service, free insurance, free registration and so on. I'm new to the UAE and can't work out which is really the best deal. HW, Abu Dhabi

Every two weeks The National features a reader's personal finance problem. If you have an issue or want to suggest a solution for another reader's concern, write to pf@thenational.ae